Raptors Maximize Partnership Revenue By Listening


While the Toronto Raptors almost secured their first NBA Championship in team history on Monday night, the team has already secured a championship-level approach to partnership sales strategy. Even though the Raptors play in a different country from every other NBA team, the approach the team employs has caused “everyone [to think] we’re on a different planet.”

 What does Jeff Deline, chief revenue officer for Maple Leaf Sports and Entertainment (MLSE), mean when he says that the NBA team that MLSE owns operates on a different planet? The two more tactical approaches the team has employed are eliminating “sales commission for selling a corporate partnership and a draft process that determines which executives are authorized to sell specific sponsor categories.”

 However, the more strategic approach that the Raptors employ is “listening and understanding a brand’s problems before actually pitching their plans.” The Raptors will now wait until the “fifth or sixth” meeting before crafting a pitch for a potential partner in a process that is “almost like you’re not even selling.”

The Raptors are employing a form of behavioral economics developed in large part by Kurt Lewin and Daniel Kahneman that both seems obvious and is counter-intuitive. The most effective way to incentivize someone to change or employ a certain behavior is by removing obstacles or barriers that prevent that behavior from occurring.

One the biggest obstacles from a company perspective is to be able to answer the question: “does this partnership fit my business needs from an economic or brand perspective?” Companies can receive hundreds of pitches from sports properties containing assets ranging from more traditional activations such as signage or television commercials to more experimental activations such as augmented or virtual reality. The question becomes which activations will best help the company achieve that goal?

Answering this question has been a challenge for sports properties. Unfortunately, a sales commission structure typically incentivizes sales teams to speak to as many companies as possible, spend less time with each potential partner, and create similar proposal templates to determine prices and values. While this may seem like an optimal strategy, it is often inefficient because the sales team will frequently be speaking to companies that are uncertain if they are a good fit for a partnership and unlikely to work with a property.

The Raptors solution to this problem is to ask partners what they need rather than “telling” them what they need. If a company knows up front that the Raptors are developing a solution tailored to their needs, it removes the uncertainty barrier. This enables a brand to make a purchasing decision more quickly and / or at a higher dollar amount because it is significantly more confident that its partnership is built for its specific business and brand goals.

 Listening does not always require speaking directly to companies. Social media listening tools, such as our Social Sentiment Analysis Platform (SAP), enable teams to determine potential partners’ customer demographics and what they are saying about the brands. These insights provide sports properties with ability to better identify companies potential partners based on their ability to reach and influence these companies’ target demographics. Proactively identifying fit also reduces uncertainty during the new partnerships sales process because companies will know they are more likely to reach the right audience to achieve their revenue and brand goals.      

 The Raptors approach should not be limited to the new sales process. Our Corporate Asset Valuation Model (CAV) and Partnership Scoreboard enable both companies and properties to understand the value of specific activations to specific companies across multiple different activation types. The CAV is focused on demonstrating the fit of a partner for each company based on its specific revenue and brand goals. The Partnership Scoreboard aggregates data from different sources and displays insights for buyers and sellers of corporate partnerships in one location. This enables what is communicated in a sales process to be tracked in a clear and concise way in the account management and renewal phases of an agreement, further eliminating the uncertainty barrier.

This strategy may not work for every team or company. Deline recognizes that the Raptors on-court success has had a positive impact on partnership revenue. In addition, commissions are often critical for retaining sales talent even though the Raptors claim to have few problems with employee retention with their new strategy. This likely stems from increased employee satisfaction that comes from the ability for the partnership team to have more meaningful conversations with a fewer number of companies to generate increased revenue.

The Raptors are not living on another planet with this approach. In fact, the team appears to be applying frequently researched behavioral economics concepts to corporate partnerships. Eliminating as much uncertainty as possible from the sales, account management, and renewal process should incentivize the behaviors that maximize value for buyers and sellers of corporate partnerships.